Engineering companies with a turnover of more than $100 million need to be aware of new mandatory reporting requirements that address modern slavery in their operations and supply chains.
Once the Modern Slavery Act 2018 (Cth) comes into force next year, large organisations will have to submit a ‘modern slavery statement’ to the Minister of Home Affairs. This reporting requirement is mandatory, and if you don’t do it, the minister can require you to provide an explanation, or perform remedial action and publish details of your non-compliance.
To keep it from getting to this point, here are some things you and your organisation need to know and ways you can stay compliant with the new legislation.
What is modern slavery?
‘Modern slavery’ is defined broadly to mean conduct that would constitute the worse forms of child labour or an offence under existing human trafficking, slavery and slavery-like offence provisions set out in Divisions 270 and 271 of the Criminal Code.
The legislation aims to minimise modern slavery risks in the Australian market by requiring large organisations to report on these risks in their operations and supply chains, as well as the actions they have taken to address these risks.
Am I affected?
The Act will apply to all organisations carrying on business in Australia with a minimum annual consolidated revenue of $100 million. But if you carry on business in New South Wales, and have a turnover of between $50 million and $100 million, you will instead report under the Modern Slavery Act 2018 (NSW).
How will I be affected?
The first report is expected to be for the 1 July 2019 – 30 June 2020 financial year, and it must be provided to the Minister within six months after 30 June 2020. However, you might have to report earlier if you are a foreign entity carrying on business in Australia with an international financial year ending after the royal assent but before 1 June 2020.
If your organisation controls various other reporting entities, you might choose to publish a joint statement instead of submitting several individual modern slavery statements. This joint statement must be prepared and given in a manner approved by the Minister.
It is recommended that you begin to review your supply chains and collect data as early as possible in anticipation of your modern slavery statement.
For example, understand what values your local and foreign suppliers have in terms of human rights, labour rights and safety. Assess your ethical performance at every stage in both local and remote operations, from mining or sourcing raw materials, through production to distribution.
What must be included in the modern slavery statement?
Your modern slavery statement must address:
- the identity of the reporting entity;
- the structure, operations and supply chains of the reporting entity;
- the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls;
- the actions taken by the reporting entity, and any entity that the reporting entity owns or controls, to assess and address those risks;
- how the reporting entity assesses the effectiveness of such actions;
- the process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with; and
- any other information that the reporting entity, or the entity giving the statement, considers relevant.
Preparation required
If your organisation is likely to be required to submit a modern slavery statement, it is recommended that you consider taking the following actions:
- Identify what your organisation’s structure, operations and supply chains are.
- Identify parts of your business operations and supply chains where there is a risk of modern slavery and manage those risks, including carrying out remedial steps.
- Identify gaps in your existing policies that potentially relate to modern slavery and amend them, and/or formulate new policies so they clearly address modern slavery.
- Consider and establish processes to assess the effectiveness of the steps taken to ensure that modern slavery is not taking place in your business or supply chains.
- Develop staff training on modern slavery risks and impacts.
This article was written by Partner Kylie Groves and Law Graduate Louise Chen from Hall & Wilcox.